Amazon Kindle Fire is Eating into iPad Sales, Poses a Threat: Analyst

Amazon Kindle Fire sold like hot cakes and reportedly, over 1 million people bought the 7-inch tablet instead of iPad 2 every week during the holiday. Kindle Fire grabbed maybe 1 [million to] 2 million iPad sales, a Morgan Keegan analyst wrote in a research note Tuesday.

According to Venture Beat, Amazon said the company has sold up to one million Kindle units each week during the holiday season.

The Amazon tablet, which was launched last September, boasts for its potential for e-reading and consumption of audio and video contents. If the users put their hands on it, they can also enjoy surfing the web, running apps, delivering, sending email and more. Thanks to its affordable price - $199, the Kindle Fire has become the most popular gift for families and friends, especially in the holiday season.

“These are customers that either would have purchased a $100 Kindle or no tablet at all,” Morgan Keegan analyst Tavis McCourt told AllThingsD. “There are some customers who clearly wanted to gift a tablet this year, and it’s cheaper to gift a Fire than and iPad. That’s where the impact comes in.”

“Clearly, a lot of folks who buy Kindle Fires simply are not in the market for a $500 tablet,” McCourt said.

“Kindle Fire is the most successful product we’ve ever launched -– it’s the bestselling product across all of Amazon for 11 straight weeks, we’ve already sold millions of units, and we’re building millions more to meet the high demand,” Amazon’s Kindle-focused vice president Dave Limp said in a press statement in mid-December.

Meanwhile, McCourt has also lowered estimates of iPad shipment.

We are lowering our unit shipment estimates for iPad in the [December] quarter from 16 million to 13 million. Based on data from Amazon, we believe the Amazon Fire likely sold 4 [million to] 5 million units this holiday season, the analyst said.